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Thursday, 22 May 14
CNPC-GAZPROM DEAL A MEDIUM - TERM POSITIVE FOR CHINA'S GAS SECTOR
 Fitch Ratings says a 30-year deal in which Russia's OAO Gazprom (BBB/Negative) will supply gas to China National Petroleum Corporation (CNPC; A+/Stable) underscores CNPC's strategic role in the country's gas pipeline infrastructure and helps China to secure adequate gas supply over the medium term, especially for the north-eastern part of the country.
Under the deal, Gazprom will supply 38 billion cubic metres (bcm) of gas a year starting around 2018 at a price that sets a new benchmark for what China is willing to pay for natural gas over longer term contracts.
The agreement also demonstrates China's determination to switch to cleaner energy. China used around 168bcm of natural gas in 2013 and aims to use over 400bcm in 2020. The import agreement will meet close to 10% of China's consumption of natural gas in the medium term. Although China has substantial gas resources, exploiting the large unconventional reserves is technologically challenging. In 2013, the country imported nearly 30% of its gas requirement. We expect imports to increase as a share of total consumption in the medium term.
The new deal helps diversify the sources of China's natural gas imports, now mainly Turkmenistan and shipments of liquefied natural gas (LNG). It follows an agreement by CNPC in 2013 to take an equity stake in a Russian LNG project and buy gas from the project, which is controlled by Russia's OAO Novatek (BBB-/Stable).
While pricing for the Gazprom deal has yet to be announced, it appears from numbers reported in the media that the price will likely be at or above USD350 per thousand cubic metres (CNY2.2 per cubic meter), which is about 60% cheaper than China's current LNG imports and similar to the price for imports from central Asia. Although Fitch does not expect LNG imports to fall significantly because the use of natural gas in China is increasing, the agency believes the Gazprom deal will help reduce upward pressure on import prices in the medium term.
China has been and will continue to increase domestic gas selling prices that are controlled by the state, which should ensure profitability for operators like CNPC. For example, following gas price increases to-date, CNPC reported profits in its mid-stream gas operations in 4Q14 after losses during which high import costs sapped profitability.
For domestic gas producers, the Gazprom deal will provide incentive to further invest in natural gas exploration and production because the deal's expected price is higher than domestic production and as the authorities are expected to liberalise domestic natural gas pricing in the next couple of years. The indicative Gazprom deal price is at least 40% more than the current spot price for domestic gas, which ranges from CNY1 to CNY1.6 per cubic meter. Fitch believes the Gazprom deal is positive for CNPC, which holds over 60% of China's gas reserves and whose realised natural gas prices from its domestic productions in 2013 were around USD180 per thousand cubic metres.
CNPC will be responsible for building the pipelines and storage facilities in China under the deal. That the state has tasked CNPC to take on such important responsibility indicates that CNPC continues to play a strategic role in China's gas infrastructure, even though its subsidiary PetroChina said in May 2014 that it would eventually sell all of its stake in the First and the Second West-East Gas Pipeline to private investors.
To domestic city gas operators, especially in the north-eastern region, the deal soothes the concerns about gas supplies over the medium term. In Fitch's view, the agreement is positive for city gas operators such as China Resources Gas (BBB+/Stable), ENN Energy (BBB/Positive) and China Gas Holdings.
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Sunday, 16 April 23
CHINA JUGGLES FOUR MAJOR ECONOMIC CHANGES IN 2023 - WOOD MACKENZIE
Change is afoot in China. Economic growth is slowing, while rising political tensions between China and the US, coupled with global supply chain re ...
Sunday, 16 April 23
CHINA'S MARCH COAL IMPORTS JUMP TO 3-YEAR HIGH - REUTERS
China’s coal imports surged in March to their highest in any month over the past three years as utilities increased purchases on expectations ...
Sunday, 16 April 23
OPEC KEEPS WORLD OIL DEMAND GROWTH OUTLOOK UNCHANGED
The OPEC Reference Basket (ORB) declined in March by $3.43, or 4.2%, m-o-m to average $78.45/b. The ICE Brent first-month contract fell by $4.33, o ...
Sunday, 16 April 23
CHEAPER SPOT LNG PRICES TEMPT SOME ASIAN BUYERS AMID SUPPLY GAINS - REUTERS
Cheaper spot prices for liquefied natural gas (LNG) are luring price-sensitive buyers back in Asia, with China and India recording rising imports i ...
Tuesday, 11 April 23
COAL USE CLIMBS WORLDWIDE DESPITE PROMISES TO SLASH IT - AAP
The burning of coal for electricity, cement, steel and other uses went up in 2022 despite global promises to phase down the fuel that is the bigges ...
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- Ministry of Transport, Egypt
- Economic Council, Georgia
- PNOC Exploration Corporation - Philippines
- Riau Bara Harum - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Energy Link Ltd, New Zealand
- Karbindo Abesyapradhi - Indoneisa
- Bulk Trading Sa - Switzerland
- Cement Manufacturers Association - India
- Manunggal Multi Energi - Indonesia
- Formosa Plastics Group - Taiwan
- ICICI Bank Limited - India
- Krishnapatnam Port Company Ltd. - India
- Electricity Generating Authority of Thailand
- Port Waratah Coal Services - Australia
- Trasteel International SA, Italy
- Leighton Contractors Pty Ltd - Australia
- Semirara Mining and Power Corporation, Philippines
- Australian Commodity Traders Exchange
- OPG Power Generation Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Wood Mackenzie - Singapore
- London Commodity Brokers - England
- Jaiprakash Power Ventures ltd
- Wilmar Investment Holdings
- The Treasury - Australian Government
- Baramulti Group, Indonesia
- Bukit Baiduri Energy - Indonesia
- SMG Consultants - Indonesia
- Kartika Selabumi Mining - Indonesia
- TeaM Sual Corporation - Philippines
- Indonesian Coal Mining Association
- Ministry of Mines - Canada
- CIMB Investment Bank - Malaysia
- International Coal Ventures Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sical Logistics Limited - India
- PTC India Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- IEA Clean Coal Centre - UK
- Aboitiz Power Corporation - Philippines
- Coastal Gujarat Power Limited - India
- Energy Development Corp, Philippines
- Merrill Lynch Commodities Europe
- Bangladesh Power Developement Board
- Cigading International Bulk Terminal - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Aditya Birla Group - India
- Mintek Dendrill Indonesia
- Oldendorff Carriers - Singapore
- Meenaskhi Energy Private Limited - India
- Romanian Commodities Exchange
- Xindia Steels Limited - India
- Eastern Energy - Thailand
- Ind-Barath Power Infra Limited - India
- Banpu Public Company Limited - Thailand
- Rashtriya Ispat Nigam Limited - India
- Ambuja Cements Ltd - India
- Maheswari Brothers Coal Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Binh Thuan Hamico - Vietnam
- Sakthi Sugars Limited - India
- Antam Resourcindo - Indonesia
- Price Waterhouse Coopers - Russia
- CNBM International Corporation - China
- Savvy Resources Ltd - HongKong
- Vizag Seaport Private Limited - India
- ASAPP Information Group - India
- Makarim & Taira - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Borneo Indobara - Indonesia
- McConnell Dowell - Australia
- Sindya Power Generating Company Private Ltd
- Medco Energi Mining Internasional
- Gujarat Sidhee Cement - India
- South Luzon Thermal Energy Corporation
- Kohat Cement Company Ltd. - Pakistan
- Australian Coal Association
- Vedanta Resources Plc - India
- Pendopo Energi Batubara - Indonesia
- Electricity Authority, New Zealand
- Chamber of Mines of South Africa
- Anglo American - United Kingdom
- Posco Energy - South Korea
- Indian Energy Exchange, India
- Star Paper Mills Limited - India
- Indo Tambangraya Megah - Indonesia
- Siam City Cement - Thailand
- Indika Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Georgia Ports Authority, United States
- Kalimantan Lumbung Energi - Indonesia
- GMR Energy Limited - India
- The University of Queensland
- Bukit Makmur.PT - Indonesia
- Renaissance Capital - South Africa
- Alfred C Toepfer International GmbH - Germany
- IHS Mccloskey Coal Group - USA
- Mjunction Services Limited - India
- Dalmia Cement Bharat India
- LBH Netherlands Bv - Netherlands
- Global Business Power Corporation, Philippines
- Eastern Coal Council - USA
- Neyveli Lignite Corporation Ltd, - India
- Bhoruka Overseas - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Global Green Power PLC Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Deloitte Consulting - India
- Toyota Tsusho Corporation, Japan
- Kapuas Tunggal Persada - Indonesia
- Bhatia International Limited - India
- Minerals Council of Australia
- Jindal Steel & Power Ltd - India
- Holcim Trading Pte Ltd - Singapore
- GVK Power & Infra Limited - India
- GAC Shipping (India) Pvt Ltd
- Sojitz Corporation - Japan
- Africa Commodities Group - South Africa
- Latin American Coal - Colombia
- Kepco SPC Power Corporation, Philippines
- Indogreen Group - Indonesia
- Sarangani Energy Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Videocon Industries ltd - India
- Kaltim Prima Coal - Indonesia
- Thiess Contractors Indonesia
- Gujarat Electricity Regulatory Commission - India
- Semirara Mining Corp, Philippines
- White Energy Company Limited
- Meralco Power Generation, Philippines
- Kobexindo Tractors - Indoneisa
- TNB Fuel Sdn Bhd - Malaysia
- VISA Power Limited - India
- Bayan Resources Tbk. - Indonesia
- Kideco Jaya Agung - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Commonwealth Bank - Australia
- Mercator Lines Limited - India
- Grasim Industreis Ltd - India
- The State Trading Corporation of India Ltd
- Salva Resources Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Iligan Light & Power Inc, Philippines
- Siam City Cement PLC, Thailand
- Bharathi Cement Corporation - India
- San Jose City I Power Corp, Philippines
- SN Aboitiz Power Inc, Philippines
- Singapore Mercantile Exchange
- Sree Jayajothi Cements Limited - India
- Independent Power Producers Association of India
- New Zealand Coal & Carbon
- Barasentosa Lestari - Indonesia
- Thai Mozambique Logistica
- Ministry of Finance - Indonesia
- Karaikal Port Pvt Ltd - India
- Central Electricity Authority - India
- Malabar Cements Ltd - India
- Bhushan Steel Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Simpson Spence & Young - Indonesia
- Tamil Nadu electricity Board
- AsiaOL BioFuels Corp., Philippines
- PetroVietnam Power Coal Import and Supply Company
- Agrawal Coal Company - India
- Central Java Power - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- MS Steel International - UAE
- Carbofer General Trading SA - India
- Marubeni Corporation - India
- Metalloyd Limited - United Kingdom
- Essar Steel Hazira Ltd - India
- Orica Australia Pty. Ltd.
- Parliament of New Zealand
- Heidelberg Cement - Germany
- Directorate Of Revenue Intelligence - India
- Intertek Mineral Services - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Timah Investasi Mineral - Indoneisa
- SMC Global Power, Philippines
- Coalindo Energy - Indonesia
- Goldman Sachs - Singapore
- Lanco Infratech Ltd - India
- Parry Sugars Refinery, India
- Ceylon Electricity Board - Sri Lanka
- Edison Trading Spa - Italy
- Tata Chemicals Ltd - India
- Madhucon Powers Ltd - India
- Straits Asia Resources Limited - Singapore
- Globalindo Alam Lestari - Indonesia
- Rio Tinto Coal - Australia
- European Bulk Services B.V. - Netherlands
- Sinarmas Energy and Mining - Indonesia
- Altura Mining Limited, Indonesia
- Interocean Group of Companies - India
- PowerSource Philippines DevCo
- Chettinad Cement Corporation Ltd - India
- Orica Mining Services - Indonesia
- India Bulls Power Limited - India
- Standard Chartered Bank - UAE
- Miang Besar Coal Terminal - Indonesia
- Coal and Oil Company - UAE
- Indian Oil Corporation Limited
- Attock Cement Pakistan Limited
- Global Coal Blending Company Limited - Australia
- Petron Corporation, Philippines
- Mercuria Energy - Indonesia
- Larsen & Toubro Limited - India
- Planning Commission, India
- Kumho Petrochemical, South Korea
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